Cut 'entitlements' for the rich, too

Friday

We've seen this movie before. Maybe dreamed this nightmare. Or covered this Congress and White House.

We've seen this movie before.

Maybe dreamed this nightmare. Or covered this Congress and White House.

We are careening downhill with broken brakes. We are out of control and a cliff is dead ahead.

We are down to one last desperate solution: We must build a bridge to somewhere to save us from plunging over the fiscal cliff and carry us safely to whatever is on the other side.

Here's the good news: We know how to build the bridge. Here's the bad news: We've failed for decades to build it because our leaders haven't had the guts to tell us the truth about what is on the other side.

So today we'll be talking about the tough truths on where we must go and what we must do to get there.

Our Democratic and Republican leaders agree on this much: Our federal debt is soaring and cutting or at least controlling it requires major reforms in how Washington raises and spends money.

And that won't happen until we make some changes in the basic assumptions that underlie our federal tax system and our massive domestic spending programs, called entitlements. Especially Medicare, Medicaid and Social Security.

Here is where the new truth gets tangled in political old-think. Many of our wealthiest individuals and corporate leaders are eager to discuss the need to reform (their translation is: cut) entitlement programs benefiting not just the poor and near poor, but also the middle- and upper-middle classes. But in truth, they too are beneficiaries of other huge federal entitlements - tax deductions to which they've long felt entitled. Like when they stash millions in offshore tax shelters and myriad other deductions that keep them and their tax lawyers rich. Their bottom line means billionaires pay tax rates that may be half what barbers and bakers pay - and General Electric reportedly paid no federal income taxes at all.

One assumption that must be changed along with reforming the more commonly known entitlement programs is that the wealthiest Americans also get government handouts and these can no longer be considered their automatic entitlements.

Interestingly, a few billionaires made that same case. Indeed, Republican presidential standard bearer Mitt Romney made a proposal during the last campaign that should be a starting point for our income tax reform. Romney proposed cutting the deductions that helped make his own tax rate way less than yours. Rather than haggle about which deductions should be scrapped, he said, let's just cap the total that can be deducted. He proposed a wide range of figures and settled on none of them. Still, that's one small step for billionaire man, one giant step for the rest of mankind.

Moving on to traditional entitlement programs, Democrats and Republicans are in violent agreement about more than they think. Because so many of us are living so much longer than folks lived in the 1930s and 1960s, Social Security will no longer work as a pay-as-you-go program. Medicare too needs ever-increasing federal support. But they must continue to serve all who need them.

It may be time to rethink one big basic assumption underlying Social Security: It really is our key form of income insurance; it provides vital basic income for the ever-expanding group of elderly Americans.

But it doesn't work like other forms of insurance we buy because everybody automatically gets its government benefits upon becoming senior citizens. When you pay premiums for health insurance or storm insurance, you know you won't receive benefits unless you have a health or storm problem covered by your policy. Yet, billionaires and multimillionaires with no income problems receive Social Security benefits payments, just like most Americans who need that money to pay basic bills.

Some experts - and some wealthy Americans - recommend reducing or eliminating Social Security benefits for those who earn millions annually. Romney also suggested reducing Medicare support for the wealthiest senior citizens.

Those new assumptions show us where we are headed. It's a livable land we can see on the other side of that fiscal cliff. But to get there, we need a bottom line commitment from the president and Congress to save us from the mess they made by rethinking the basic assumptions driving our debt madness. Let them commit to filling in the blanks in 2013.

And let their binding bipartisan pact be our bridge to a fiscal somewhere that is, at last, safe and sane.